Senate to Consider Giving States More Control on U.S. Highways

Financing the Highway Trust Fund, which pays for U.S. road and public-transportation projects using money from a vehicle-fuel tax of 18.4 cents a gallon, has been the main sticking point in passing a new transportation bill. Photo: Jonathan Alcorn/Bloomberg Close

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Financing the Highway Trust Fund, which pays for U.S. road and public-transportation projects using money from a vehicle-fuel tax of 18.4 cents a gallon, has been the main sticking point in passing a new transportation bill. Photo: Jonathan Alcorn/Bloomberg

The U.S. Senate will consider giving states more control over spending of federal gasoline-tax revenue for transportation projects when debate on highway- funding legislation resumes next week.

The Senate is scheduled to vote on a proposal by Senator Jim DeMint, a South Carolina Republican, to grant most of the money raised by federal gas taxes to the states after they return to the issue March 13. It’s the first transportation- related provision that senators deal with as they work through 30 amendments to a two-year, $109 billion transportation plan.

DeMint’s states-rights plan would so reduce U.S. highway funding that it would be tough to refer any longer to a federal system, said Jeff Shoaf, senior executive director of government and public affairs at the Associated General Contractors, a construction trade group in Arlington, Virginia.

“This would take the plant out and rip it out with the weeds,” said Shoaf. “The disruption you would have from doing this would really make it seem like Congress doesn’t know what it is doing.”

The Senate action marked progress in a delayed effort to produce a multiyear spending plan. Congress has limped along with eight short-term extensions since the last multiyear transportation bill expired in 2009.

The Senate deal on transportation spending reached last night may advance the plans to the U.S. House, where Republicans are divided on the number of years a bill should span, its funding, and whether gasoline taxes pay for mass transit.

House Plans

House Speaker John Boehner of Ohio said yesterday that the House’s plan “right now” is to bring up the Senate version of the transportation measure “or something like it.” He also said House Republicans will still discuss a longer-term approach if that can attract needed votes.

House Democratic Leader Nancy Pelosi of California said yesterday that House Republicans are “in disarray” over the transportation measure. She said that while House Democrats can accept the Senate bill, “let’s not mistake it for what we need to do for a real comprehensive jobs bill for our country.”

House members may encounter pressure to support highway funding after visiting home districts next week, said Representative Bill Shuster, a Pennsylvania Republican who is working to round up votes for the bill.

“They’re going to talk to people, you know, local community leaders who need that bridge, local community leaders that want a roadway completed, contractors who build this stuff,” Shuster said. “Every district in America is affected by this bill.”

Vehicle-Fuel Tax

Financing the Highway Trust Fund, which pays for U.S. road and public-transportation projects using money from a vehicle- fuel tax of 18.4 cents a gallon, has been the main sticking point in passing a new bill. The tax was last increased in 1993 and without additional income the fund may be insolvent as soon as October, the Congressional Budget Office said in January.

At a news conference, Senate leaders said the Republican House speaker was sending too many mixed signals on his intentions with a measure that may stoke job creation in the construction sector if signed into law.

Senate Majority Leader Harry Reid said he’s heartened to hear that Boehner’s latest position seems to be to take up the Senate legislation.

“My reaction is that it’s a significant step forward,” Reid said. “They should forget about their job-destroying, destructive” version drafted by House Transportation and Infrastructure Committee Chairman John Mica, a Florida Republican.

U.S. Transportation Secretary Ray LaHood said he’s “glad the Senate is moving along. It’s a very bipartisan approach and that’s what we need. That’s what we’ve always had and that’s the way we need to go.”

The House bill is H.R. 7. The Senate bill is S. 1813.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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